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Agrify Sells Cultivation Business to Focus on THC Beverages, Eliminates $7M in Debt

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Agrify Sells Cultivation Business to Focus on THC Beverages, Eliminates M in Debt





Agrify (AGFY) has announced and completed the sale of its cultivation business to CP Acquisitions, , an entity affiliated with former CEO Raymond Chang. The transaction, signed and closed on December 31, 2024, includes the sale of all cultivation-related assets, including Vertical Farming Units (VFUs), total-turnkey (TTK) solution assets, and Agrify Insights™ software solutions.

The deal involves the assumption of cultivation business liabilities by CP and the termination of two convertible notes held by CP totaling approximately $7 million. Following this transaction, Agrify plans to focus on THC-related growth categories, particularly hemp-derived THC Delta 9 (HD9) beverages, including their Señorita THC Margarita product currently available in 9 states and online.

Agrify (AGFY) ha annunciato e completato la vendita della sua attività di coltivazione a CP Acquisitions, un’entità affiliata all’ex CEO Raymond Chang. La transazione, firmata e chiusa il 31 dicembre 2024, include la vendita di tutti gli asset relativi alla coltivazione, comprese le Unità di Coltivazione Verticale (VFU), gli asset delle soluzioni chiavi in mano (TTK) e le soluzioni software Agrify Insights™.

L’accordo prevede l’assunzione da parte di CP delle passività legate all’attività di coltivazione e la risoluzione di due note convertibili detenute da CP per un totale di circa 7 milioni di dollari. A seguito di questa transazione, Agrify prevede di concentrarsi su categorie di crescita legate al THC, in particolare sulle bevande a base di THC Delta 9 (HD9) derivate dalla canapa, compreso il loro prodotto Señorita THC Margarita attualmente disponibile in 9 stati e online.

Agrify (AGFY) ha anunciado y completado la venta de su negocio de cultivo a CP Acquisitions, una entidad afiliada al ex CEO Raymond Chang. La transacción, firmada y cerrada el 31 de diciembre de 2024, incluye la venta de todos los activos relacionados con el cultivo, incluidas las Unidades de Cultivo Vertical (VFU), los activos de soluciones llave en mano (TTK) y las soluciones de software Agrify Insights™.

El acuerdo implica la asunción de las deudas del negocio de cultivo por parte de CP y la finalización de dos notas convertibles mantenidas por CP, que totalizan aproximadamente 7 millones de dólares. Tras esta transacción, Agrify planea centrarse en categorías de crecimiento relacionadas con el THC, especialmente en bebidas de THC Delta 9 (HD9) derivadas del cáñamo, incluido su producto Señorita THC Margarita, disponible actualmente en 9 estados y en línea.

Agrify (AGFY)는 전 CEO 레이몬드 창과 관련된 CP Acquisitions에 자사 재배 사업을 매각했다고 발표하며 이 거래를 완료했습니다. 2024년 12월 31일에 서명 및 종료된 이 거래에는 수직 재배 유닛(VFU), 총 턴키(TTK) 솔루션 자산 및 Agrify Insights™ 소프트웨어 솔루션을 포함한 모든 재배 관련 자산의 판매가 포함됩니다.

이 거래는 CP가 재배 사업의 부채를 인수하고 CP가 보유하고 있는 두 개의 전환사채를 총 약 700만 달러에 종료하는 것을 포함합니다. 이 거래 후, Agrify는 THC 관련 성장 분야, 특히 헴프 유래 THC 델타 9(HD9) 음료에 집중할 계획이며, 현재 9개 주와 온라인에서 제공되는 Señorita THC Margarita 제품을 포함합니다.

Agrify (AGFY) a annoncé et finalisé la vente de son activité de culture à CP Acquisitions, une entité affiliée à l’ancien PDG Raymond Chang. La transaction, signée et finalisée le 31 décembre 2024, comprend la vente de tous les actifs liés à la culture, y compris les Unités de Culture Verticale (VFU), les actifs de solutions clés en main (TTK) et les solutions logicielles Agrify Insights™.

L’accord implique l’assumption par CP des passifs liés à l’activité de culture et la résiliation de deux billets convertibles détenus par CP totalisant environ 7 millions de dollars. Suite à cette transaction, Agrify prévoit de se concentrer sur les catégories de croissance liées au THC, en particulier les boissons au THC Delta 9 (HD9) dérivées du chanvre, y compris leur produit Señorita THC Margarita actuellement disponible dans 9 États et en ligne.

Agrify (AGFY) hat den Verkauf seines Anbaugeschäfts an CP Acquisitions, eine mit dem ehemaligen CEO Raymond Chang verbundene Einheit, angekündigt und abgeschlossen. Die Transaktion, die am 31. Dezember 2024 unterzeichnet und abgeschlossen wurde, umfasst den Verkauf aller mit dem Anbau verbundenen Vermögenswerte, einschließlich der vertikalen Anbaueinheiten (VFU), der schlüsselfertigen Lösungsgüter (TTK) und der Agrify Insights™ Softwarelösungen.

Das Geschäft beinhaltet die Übernahme der Verbindlichkeiten des Anbaugeschäfts durch CP und die Beendigung von zwei von CP gehaltenen umwandelbaren Anleihen mit einem Gesamtbetrag von etwa 7 Millionen Dollar. Nach dieser Transaktion plant Agrify, sich auf von THC abhängige Wachstumsbereiche zu konzentrieren, insbesondere auf THC Delta 9 (HD9) Getränke aus Hanf, einschließlich ihres Produkts Señorita THC Margarita, das derzeit in 9 Bundesstaaten und online erhältlich ist.

Positive


  • Elimination of approximately $7 million in convertible notes debt


  • Transfer of cultivation business liabilities to CP Acquisitions


  • Strategic focus shift to THC beverage market


  • Simplification of business model and balance sheet


Negative


  • Divestment of core cultivation business including VFUs, TTK solutions, and software assets


Insights



The sale of Agrify’s cultivation business marks a significant strategic pivot, with multiple financial implications. The transaction eliminates $7 million in convertible notes debt through their termination, immediately strengthening the balance sheet. The deal’s structure, involving the transfer of both assets and related liabilities to CP Acquisitions, effectively streamlines Agrify’s operations while reducing debt burden. This divestment transforms Agrify from a cannabis cultivation technology company into a focused THC beverage player. The market for hemp-derived THC beverages, particularly HD9, represents a high-margin, consumer-packaged goods opportunity with potentially lower regulatory hurdles and capital requirements compared to cultivation technology. The shift from a capital-intensive B2B model to a B2C beverage business could improve cash flow dynamics and reduce operational complexity. However, success in the competitive THC beverage market will require significant marketing investment and distribution capabilities to scale brands like Señorita.


The strategic repositioning into the THC beverage market through Señorita represents a calculated bet on evolving consumer preferences and market dynamics. The timing aligns with growing consumer interest in alcohol alternatives and the “sober curious” movement, particularly relevant during Dry January initiatives. The THC beverage market offers several advantages: lower barriers to entry compared to cultivation technology, direct-to-consumer opportunities and potential for higher margins. Señorita’s presence in 9 states and online channels provides a solid foundation for expansion. The focus on natural, low-calorie formulations addresses current wellness trends. However, the THC beverage space is increasingly competitive, with both established cannabis companies and traditional beverage makers entering the market. Success will depend on brand differentiation, distribution network strength and effective marketing strategies to capture market share in this rapidly evolving segment.












Move Further Simplifies the Company’s Business Model and Balance Sheet

TROY, Mich., Jan. 06, 2025 (GLOBE NEWSWIRE) — Agrify Corporation (Nasdaq:  AGFY) (“Agrify” or the “Company”), a leading provider of branded innovative solutions for the cannabis and hemp industries, today announced the Company has signed an agreement for and closed the sale of its cultivation business to CP Acquisitions, LLC (“CP”), an entity affiliated with Raymond Chang, the Company’s former Chairman and Chief Executive Officer (the “Transaction”). The Transaction involves the sale of the Agrify cultivation business and assets, the assumption of liabilities related to the cultivation business by CP, and the termination of two convertible notes held by CP totaling approximately $7 million.

On December 31, 2024, Agrify signed an Asset Purchase Agreement for the Transaction with CP and simultaneously closed the Transaction. Under the Asset Purchase Agreement, CP agreed to acquire all assets related to the cultivation portions of the Agrify business from the Company, including but not limited to, the Company’s Vertical Farming Units (“VFUs”), the related Agrify total-turnkey (“TTK”) solution assets and Agrify InsightsTM software solutions (collectively the “Cultivation Business”).

“We are pleased to complete the sale of Agrify’s cultivation business and to simplify our business. We believe focus drives excellence and this move allows us to focus on more attractive growth categories tied to THC demand. This includes hemp-derived THC Delta 9 (HD9) beverages and our amazing drinks like Señorita, the award-winning THC Margarita available in 9 states and online direct to consumers,” said Agrify Chairman and Interim CEO Ben Kovler. “Señorita, the country’s leading THC Margarita is an all-natural, low calorie, great tasting alcohol alternative that provides an elevated experience. In this Dry January, Señorita feels like an obvious choice for America (www.senoritadrinks.com). Selling the cultivation business allows Agrify to focus on the future, which we believe includes Más Señorita.”

“I am pleased to continue the cultivation business, and the separation of business segments will allow each party to better concentrate their efforts going forward,” said Raymond Chang.

About Agrify (Nasdaq:AGFY) 
Agrify Corporation (“Agrify” or the “Company”) is a developer of branded innovative solutions for the cannabis and hemp industries. Its Señorita brand offers consumers HD9 beverages that mirror well-known cocktails like a margarita – in two flavors – classic and mango. Known for its clean, fresh flavors and commitment to high-quality, natural ingredients, Señorita offers a low-sugar, low-calorie alternative to alcoholic beverages and is available at top retailers including Total Wine, ABC Fine Wine & Spirits, and Binny’s in nine U.S. states and Canada, with plans for expansion and future availability in premier on-premises destinations. Products are also available for direct-to-consumer purchase where permissible under state law at www.senoritadrinks.com.

Forward-Looking Statements 
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning Agrify and other matters. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements including, without limitation, statements regarding future financial results, potential growth opportunities and plans for expansion, and potential trends in the hemp-derived beverage market. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. You should carefully consider the risks and uncertainties that affect our business, including those described in our filings with the Securities and Exchange Commission (“SEC”), including under the caption “Risk Factors” in our Annual Report on Form 10-K filed for the year ended December 31, 2023 with the SEC, which can be obtained on the SEC website at www.sec.gov. These forward-looking statements speak only as of the date of this communication. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our public announcements and filings with the SEC. 

Contact  

Agrify Investor Relations 
IR@agrify.com
(857) 256-8110 









FAQ



What assets did Agrify (AGFY) sell in its cultivation business transaction?


Agrify sold its Vertical Farming Units (VFUs), total-turnkey (TTK) solution assets, and Agrify Insights™ software solutions to CP Acquisitions,


How much debt was eliminated in Agrify’s (AGFY) cultivation business sale?


The transaction terminated approximately $7 million in convertible notes held by CP Acquisitions,


What is Agrify’s (AGFY) new business focus after selling its cultivation division?


Agrify is focusing on THC-related growth categories, particularly hemp-derived THC Delta 9 (HD9) beverages, including their Señorita THC Margarita product.


When did Agrify (AGFY) complete the sale of its cultivation business?


Agrify signed and closed the sale of its cultivation business on December 31, 2024.


Who purchased Agrify’s (AGFY) cultivation business?


CP Acquisitions, , an entity affiliated with Raymond Chang, Agrify’s former Chairman and Chief Executive Officer, purchased the cultivation business.





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